Summary of Interpretation No. 31

Earnings per share data reflect the dilutive effect of outstanding stock options, including stock appreciation rights and other variable plan awards, computed by application of the treasury stock method under APB Opinion No. 15, Earnings per Share. Under that method, earnings per share data are computed as if the options were exercised at the beginning of the period (or at date of grant, if later) and as if the funds obtained thereby were used to purchase common stock. This Interpretation specifies that the funds used in applying the treasury stock method are the sum of the cash to be received on exercise, the compensation related to the options to be charged to expense in the future, and any tax benefit to be credited to capital. The Interpretation also provides guidance for how to include the effect of variable plans, combination plans, or plans payable in cash or in stock in earnings per share computations.